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How to Calculate Your EFC and True Cost of College

Here’s a helpful article on financial aid and your expected family contribution. We hope this helps you calculate the cost of college!

What is the Expected Family Contribution (EFC)?

The EFC “is a measure of your family’s financial strength and is calculated according to a formula established by law.” Source: http://www.fafsa.ed.gov/help/fftoc01g.htm. In a nutshell, it is a number that is used to determine how much financial aid you are eligible to receive (what is called your “financial need”). The formula for determining your financial need is: (cost of attendance) – (EFC) = financial need.
How do I find out my EFC?

Students may have varying reasons for wanting to calculate their EFC, but if you complete your FAFSA early, you can find out your EFC in as few as 3 days after completing it. Your EFC is reported on your Student Aid Report (SAR), which you receive after your you submit your FAFSA. If FAFSA has a valid e-mail address on file for you, you will be sent an e-mail, within 3 to 5 days, with instructions on how to access an online copy of your SAR. Otherwise, it will be mailed to you within 7 to 10 days.

If you would like to calculate your EFC before receiving your SAR, you can find detailed information about the formula at: http://ifap.ed.gov/efcformulaguide/attachments/010512EFCFormulaGuide1213.pdf. There are also a number of online resources that provide EFC calculators (just be sure that if you are NOT giving any personally identifiable information, such as your name, social security, etc., when using an online EFC calculator).

Does my financial need reflect my true cost of college?

It depends. Schools often include tuition and other school fees, room and board, books, travel, and incidentals in their cost of attendance. Depending on your circumstances, these estimates may or may not accurately reflect your needs. These costs can be affected by any number of factors (e.g., whether or not you live on or off campus, whether you bring a car to school, etc.). Ideally, you should try to bring your costs below the school’s estimated cost of attendance.

Why? Remember that your calculated financial need is that the amount you are eligible to borrow. While the ability to borrow can be critical in securing the opportunity for post-high school education, borrowing money has a cost.

What are the different types of loans and their costs?

• Federal Direct Stafford Subsidized Loan

These loans are given based on financial need. The federal government pays the interest on the student’s behalf while the student is in school at least half-time, during a six-month grace period following school, and during authorized periods of deferment.

• Federal Direct Stafford Unsubsidized Loan

These loans are not based on financial need. Students are solely responsible for paying the interest during the lifetime of the loan.

• Private loans

This is an option if the cost of attendance exceeds the amount a student or parent is able to borrow through federal student aid programs. These loans typically have higher interest rates than federal loans. Students are responsible for paying the interest during the lifetime of the loan.